Why the White Oak Global Advisors Lost the Lawsuit and Paid Over $96 Million?

White Oak Global Advisors is an investment management firm based in New York, USA. It was back in 2018 when the New York State Nurses Association Pension Plan filed a lawsuit against them. They were accused of mishandling client funds and violating fiduciary duties.

Unfortunately, all allegations turned out to be valid and the arbitration panel ruled against White Oak Global Advisors. They were ordered to pay over $96 million for violating ERISA upon their involvement in fiduciary breaches and mismanagement of funds.

Let us walk you through every detail of the White Oak Global Advisors Lawsuit—making it easier to grasp what happened and why.

First of all, you need to know that the New York State Nurses Association Pension Plan hired White Oak Global Advisors to manage a substantial fixed-income portfolio. Their initial contract was finalized in 2013. White Oak was entrusted with overseeing $80 million of the pension fund’s assets. All with the expectation of acting in the best financial interests of the pension plan members.

White Oak Global Advisors Lost the Lawsuit

It was 2017 when the NYSNA Pension Plan discovered that Russell Niemie (their chief investment officer at the time) was involved in undisclosed job negotiations with White Oak. It happened while he was overseeing the pension’s investments managed by the firm. This conflict of interest led to concerns over the integrity of the investment decisions made under his recommendation—including the renewal of White Oak’s management contract.

Following this discovery, the NYSNA Pension Plan decided to sever ties with White Oak. They subsequently initiated arbitration proceedings in July 2018 to address the alleged mismanagement and fiduciary breaches. It is worth noting that the decision to move to arbitration was based on clauses in their contract that likely required disputes to be settled out of court.

Both sides presented their evidence and arguments during the arbitration process. The NYSNA Pension Plan showed proof that White Oak “mishandled funds as well as breached their fiduciary duty”.

White Oak Global Advisors Lost the Lawsuit

As expected, White Oak denied all allegations—stating that the investments were speculative and investors were adequately informed of the risks involved. They also emphasized that the timing of the lawsuit coincides with a market downturn.

The final verdict was made in 2019. The arbitration panel ruled in favor of the NYSNA Pension Plan—awarding more than $96 million in damages. The U.S. District Court affirmed this decision in March 2021. This confirmed the arbitration award—only to mandate White Oak to make the payment.

Finally—it was 4th August 2021 when White Oak Global Advisors paid the owed amount of over $96 million to the New York State Nurses Association Pension Plan.

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